Why Sawyer School lost students, federal dollars before closure

The Sawyer School was apparently bleeding federal aid prior to its abrupt closure on New Year's Day. The Federal Department of Education says the for-profit school had gone from nearly $7.5 million in federal tuition dollars for the 2011-2012 academic year down to $2 million this year.

What happened? Well, one answer is declining enrollment. Sawyer reported 796 students in Rhode Island in the fall of 2011, but only 302 students when it shut down earlier this month.

There may be a little more to the story than declining enrollment. One theory is that Sawyer relied too heavily on students known as "able to benefit," or ATB. These students have no high school diploma or GED, but they could qualify for federal tuition assistance if they scored high enough on a test known as the "Able to Benefit Test."

The federal policy on ATB students changed in July of 2012, making them ineligible for tuition assistance, according to the Accrediting Council of Independent Colleges and Schools (ACICS), which accredited Sawyer until it abruptly closed.

ATB students tend to come from low-income backgrounds, so ACICS says the policy change has been a hardship for schools like Sawyer, which draw largely from low-income, low-education level students, who are often unable to afford tuition without federal grants and student loans.